US Treasury yields slide amid retail sales, PPI

U.S. Treasuries prices rose on Friday, with yields hitting their lowest levels in a week, as weaker-than-expected U.S. retail sales and producer prices data reinforced the view of modest economic growth and tame inflation.

The data also supported the notion the Federal Reserve would raise interest rates gradually if it decides to tighten monetary policy.

"We had a weak set of data and people realize the Fed's rate-hike plan will be slow and data-dependent," said Com Crocker, managing director of government and agency securities trading at Mesirow Financial in New York.

The U.S. Treasury Department this week sold $64 billion of debt for its quarterly refunding to mostly solid investor demand.

Companies have raised $29 billion in the investment-grade credit market this week, according to IFR, a unit of Thomson Reuters.

"We had supply, both government and corporate, this week, which has been well received. There is still a lot of cash on sidelines to put to work," Crocker said.

While Friday's retail and producer price reports dialed down some expectations of a December rate hike, a number of top Fed officials have signaled such a move is likely barring a sharp deterioration in the economy and financial markets.

"Uncertainty about the longer-run destination is not an argument to delay taking the first step," Cleveland Fed President Loretta Mester said on Friday.